Continuous Improvement: The Art & Zen of Operations Management

The manufacturing industry gave us interchangeable parts, Barbie dolls, and Nerf toys, and for that we are grateful.

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It also established the theory and practice of continuous improvement, which is not as fun as Nerf balls, but infinitely more useful.

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The Hollywood cliche of ‘We made it’ doesn’t really apply to business success—if you make it to the top of your industry, you’ll have to work harder than ever to keep it that way. You’ll have to fight off competitors, continue to innovate, and improve operational efficiency to maintain your success as you grow.

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A tall order, no doubt, which is why we’ve developed practices for each of those areas. Today we’re going to take a closer look at the concept of continuous improvement and why you should implement it in your operations.

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Let’s dive in.

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What Is Continuous Improvement?

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Continuous improvement is a business philosophy popularized by Japanese manufacturers like Toyota. In Japan, the philosophy falls under the word “Kaizen,” which translates to “change for the better.”

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To use a gross oversimplification, this process boils down to a few steps:

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While it sounds fairly straightforward, it’s important to understand just how different this process is than the large-scale pre-planning and extensive project scheduling that still happens today.

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Instead of completely overhauling a process, business unit, or entire company, continuous improvement models opt to run small experiments and put emphasis on reviewing and acting upon the results. From there, the idea is to make changes (small as they may be) to those process to increase beneficial outcomes. The key to this is pushing these updates out rapidly—the enemy of innovation is incubating something until it’s perfect.

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You’ve likely heard of similar project management models by many different names: agile, kanban, lean startup, and so forth. These are often combined to facilitate continuous improvement.

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And these processes aren’t just used in manufacturing; there are dozens of applications across industries and verticals.

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For example, airlines monitor customer experience through surveys at regular intervals. They adapt things like meal choices to improve customer experience. Have you noticed most airlines don’t serve peanuts anymore? The risk of allergic reaction while airborne is too great for the choice to eat peanuts—pretzels will have to do.

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In software, engineers are constantly tweaking algorithms after reviewing data points like error rate, user sentiment, successful goal completions, and a plethora of other metrics. Changing the color or location of a button can have an impact on usability, but you’ll never know unless you test it.

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Even something as intangible as organizational culture can use continuous improvement methods to increase results. Corporate initiatives like team building exercises can be implemented and measured to improve morale.

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So how does continuous improvement work?

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Incrementally.

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You can’t make large, sweeping, 10x-level changes every day—that would be awesome, but it’s just not realistic.

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We tend to prefer the idea from James Clear to make a 1% improvement every day. A 1% improvement every day for a year means you’ll be 37x better by the end of the year!

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The little things add up, especially if you know where to look. Consider these three tips to help you find opportunities for continuous improvement.

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1. Avoid taking losses - Everyone is going to lose a client or an account at some point, but that’s not what we’re talking about. Start with the small things you can control. For example, if you make sure your meetings start and end on time, everyone in the room saves 15 minutes per day. If you require all employees change their passwords every 90 days, your organization will be more secure. Find small things where you can potentially ‘lose’ and start eliminating them.

2. Do what you’re good at - Often times, you don’t need a completely new strategy or vision for your business—you just need to work more on the things that are going well for you. Look at where you’re strong—whether it’s customer service or price or speed of delivery—and see if there are any hacks to get even better.

3. Measure, measure, measure - Clearly, if you’re not measuring these “little things” we keep talking about, you’ll never know if you’re improving or not. One of the easiest ways to get started is to look at the end result and work backwards. Did you hit your sales quota last week? No? Make more sales calls. Are you struggling to retain clients after the first 3 months? Review your onboarding process and look for snags.

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The key is to get into a habit of doing these things and hold yourself and your employees accountable. Without solid habits ingrained into your company culture, continuous improvement initiatives are doomed to fail.

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Speaking of the challenges with continuous improvement...

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The Challenge Of Continuous Improvement

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Getting operational changes to stick is hard.

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There are three issues that make continuous improvement difficult.

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First, you have the black and white details new processes, tools, and structure. All of these have to be researched, implemented, maintained, and reviewed often for success.

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The other side of the coin is the soft skills, such as leadership traits and organizational culture that desires to be continuously improving. Is your CEO and board committed to all of the activity needed to create that sort of culture at your organization? You had better hope so, because without that, all the productivity and measurement tools in the world won’t help you.

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Executives and employees alike need to commit themselves to a new way of thinking, allow an open mind into new processes that may seem counterintuitive as the goal shifts or as you try something that is different than ‘the way things have always been done.

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If you’re able to accomplish both those, you’ll still have to communicate the fact that these changes and tweaks will continue to happen, even if the operational update was mildly successful. Many new processes require data to perfect, and that’s something you can’t necessarily plan for, but rather need to accumulate after you launch. Communication is key to getting through this awkward stage.

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To create a lasting habit of continuous improvement, you’ll need both hard and soft skill sets. But it’s worth it!

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Benefits Of Continuous Improvement

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Of course, the whole reason we’re thinking outside the box and overcoming challenges is to reap the benefits of continuous improvement.

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Streamlined workflows is likely the most obvious benefit. If you’re constantly looking, experimenting with, and measuring your processes—no matter how small—things are bound to get more efficient.

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What’s truly advantageous about streamlining workflows, however, is the domino effect that has on other areas of the business. When processes get better, you reduce waste, therefore reducing cost. This could lead to higher margin for the corporation, or you could pass the savings onto the customer in hopes for higher volume. Either way, that’s a business outcome that no executive will argue with.

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Additionally, when you streamline workflows it reduces the amount of menial labor your employees must endure, therefore opening them up for more creative work. This shift in day-to-day activities can stimulate your staff and put a little more pep in their steps.

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Lastly, continuous improvement gives you a lot more flexibility. If a team is performing well while cutting their hours, they might be free to take on additional tasks and projects that are lower priority, but still important for the company’s future. And since you’re moving to a metric-based system for scoring value, do your employees really need to continue to punch a clock? This might be an opportunity to see if some remote days can actually drive efficiency—another tweak you can make in the pursuit of continuous improvement.

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From manufacturing to software to hospitality, there are just so many opportunities for companies to implement continuous improvement strategies, regardless of their industry.